French farce

Spectator, The, Jun 28, 2003 by Johnson, Jo

Jo Johnson on how, once again, France has failed to become the financial 'champion of the universe'

It is Hollywood's most predictable script. 'Dazzle foreign investors, force them to spend as much as possible and then drive them out once they're broke.' For the third time in a decade, the French arc beating a humiliating retreat from Beverly Hills. This time the French national champion in question Vivendi Universal, a once mighty conglomerate run into the ground by a megalomaniac called Jean-Marie Messier - has taken such a drubbing, it is doubtful that there will ever be a sequel. For the past 12 months, a company that was once the undisputed flagship of French capitalism has been on its knees begging its banks for mercy. France's largest private-sector employer has escaped bankruptcy thanks only to the embarrassed intervention of the French establishment. An auction of its Hollywood businesses started in earnest this week. By the autumn, Vivendi Universal hopes to be shot of Hollywood once and for all.

Vivendi Universal destroyed going on for $100 billion trying to put France back on the map of the US-dominated media industry. High-level political backing for an industrial grand projet which would challenge the 'soft power' of the US media-industrial complex makes the lowering of the Tricolore hard to swallow. To understand why requires a small flashback. In June 2000, just a few weeks after US stocks surged to their final bull-market peak, Messier was feted as the very incarnation of 'la France qui gagne'. The 43-year-old Napoleon lookalike, a brilliant but greedy technocrat with little hands-on business experience, had just astonished the world. Vivendi, a 19th-century water utility once known as the Generale des Eaux, had just announced the largest ever French takeover of a US company. The French cock crowed with delight as Messier ponied up $40 billion to buy Universal Studios, maker of Jaws and E.T., and Universal Music, producer of one in every three albums sold in the US.

Of course, even tub-thumping nationalists suspected the triumph of hope over experience, and Vivendi's once hot-rodding shares never recovered. Memories of two previous French tilts at Hollywood were far too fresh. Credit Lyonnais, the state-owned bank, had collapsed in 1993 at a cost to the French taxpayer of more than $20 billion after it backed an Italian waiter in taking over Metro-Goldwyn-Mayer, the smallest of the big six studios. It started to go wrong after Giancarlo Parretti moved a lion into his office and began cruising around Beverly Hills in a gold-plated Rolls-Royce. A few years later, Canal Plus, a French pay-television network, threw pots of dumb money at Carolco, a spare-no-cost producer of action movies which for several years was credited with single-handedly ruining the economics of Hollywood by paying over the odds for A-list muscle.

His shareholders were quaking in their boots, but Messier had the full blessing of the French Republic as he put France on an offensive footing in the culture wars. He published a bestselling manifesto tilled j6m.com, an abbreviation of his nickname 'Jean-Marie Messier, moi-meme, maitre du monde.' His panache 'You've got balls,' he claimed his arch-rival Rupert Murdoch told him - seemed to liberate the country from a wearisome complex over its own relative decline. 'Jean-Marie Messier,' purred the French ambassador to the US, Francois Bujon de l'Estang, as he anointed him the Franco-American chamber of commerce's Person of the Year, 'you have shown a clear determination to become a major actor of globalisation and seize the opportunities that it offers, instead of concentrating on the threats that it can bring. You are the prototype of a new breed of French executive that dispels the traditional cliches about France. . . . The chamber recognises today the new French economy . . . an economy of entrepreneurs [reminding us all that this is a French word], of business creation, of Internet start-ups that are the avant-garde of la France qui gagne.'

Things improved further a few days later when Zinedine Zidane led the French football team to victory in the European championship, repeating the national side's triumph at the 1998 World Cup. France was truly on top of the world. Erik Izraelewicz, the chief editorialist at Les Echos, France's main business newspaper, saw Messier's landing in Hollywood as a symbol of a new-found French aggression. '"We are the champions! We are the champions!" Once again this refrain is on everyone's lips,' Izraelewicz wrote. 'Whereas before, the country was worrying about "the end of work" and "austerity without end", today it sees only la vie en rose and la France qui gagne. After a decade of recession, consumers and businesses are euphoric. Confidence indicators are off the charts. Sales of cars and mobile telephones are soaring. On almost every front, the France that considered itself lost, crushed by American imperialism or by the German steam-roller, has suddenly become "champion of the universe".'